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Discussant's Response to
Auditor Reviews of Changing Prices Disclosures Robert W. Berliner
Arthur Young & Company
Before addressing the specifics of the Skousen/Albrecht research, I should disclose my involvement in the subject area because of the influence it may have on my evaluation of their findings.
I am the partner in my firm with lead responsibility for the subject area of accounting for changing prices and have been closely involved for the past ten years with the efforts of the Financial Accounting Standards Board, Securities and Exchange Commission, and accounting bodies in certain other countries in this area. This involvement led to my being named chairman of the Auditing Standards Board's task force on Auditor Involvement with Required Supple­mentary
Information. The activities of this task force resulted in the issuance of SAS 27, Supplementary Information Required by the Financial Accounting Standards Board and SAS 28, Supplementary Information on the Effects of Changing Prices. Further, I am the principal author of the Arthur Young research paper on the use of changing prices information by financial analysts, and I reported on this research at the FASB research conference in January 1983. What all this background means is that I believe that changing prices information has merit. In fact, I have helped to shape the related auditing standards and have conducted research that overlaps the subject research in the area of usefulness of FAS 33 data.
I was, as well, one of the five members of the ASB's Planning Subcommit­tee
that evaluated and recommended AICPA participation in the funding of the subject research. And, further yet, I was one of the national office partners of major CPA firms to be interviewed by the researchers for purposes of providing input to the used in the development of their questionnaire.
These prefatory remarks should constitute full disclosure of the reasons why I may be considered a nonindependent discussant of this research paper. I can assure you, however, that I have not accepted any money or other treasures from either Professor Skousen or Professor Albrecht and have endeavored to maintain objectivity in reviewing their research paper.
Turning, then, to the paper itself, let me begin by focusing on the research objectives. As set forth in the second paragraph on the report's first page, they were:
• To determine the nature and extent of procedures used by auditors,
• To identify the costs and special problems related to the reviews, and
• To seek input from auditors concerning the perceived usefulness and auditability of FAS 33 data.
Did the researchers accomplish their stated objectives? I'd answer that with a qualified "yes"—something like "more or less."
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